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Ride-sharing services have been operating in a potentially dangerous legal gray area involving all kinds of insurance issues for a long time, with drivers not being covered while giving a ride to passengers through ride-hailing apps. This is one of the reasons why the ride-sharing industry has been surrounded with controversy and why companies like Uber and Lyft have been banned from offering their services in some countries, as well as some U.S. states. But, it seems that these issues are about to be resolved, with a couple of insurance companies in the U.S. working on new insurance products aimed at covering drivers using their personal vehicles for commercial purposes.
Allstate Corporation, one of the largest insurers in the country, has announced that it will start offering ride-sharing insurance in four states by the end of this year, which will cover drivers who transport passengers through smartphone apps like Uber and Lyft in their personal vehicles. The company said that its latest product, called Ride for Hire, will cover ride-sharing drivers in case they get involved in a collision while transporting passengers, as well as while traveling to pick up new passengers, which is usually not covered by their own car insurance policies. Drivers who decide to purchase the Ride for Hire policy will have to pay anywhere between $15 and $20 a year.
“The ride-hailing economy continues to grow and our products evolve with our customers’ potential needs,” says Allstate Product Vice President Dave Border. “We want to help ensure our customers can more confidently participate as TNC drivers.”
At first, Allstate’s Ride for Hire endorsement will be available to drivers in Colorado, Illinois, Texas and Virginia, and later on, it will be offered in several other major ride-sharing markets across the United States.
Allstate says that this policy will help fill in the gaps that exist in collision, comprehensive, and uninsured/underinsured motorist coverages, as well as the gaps that appear when a driver’s personal car insurance policy liability coverage limits are higher than the limits provided by the companies they work for.
“We wanted to offer an innovative solution for our customers who drive for a TNC and we wanted to do it at the most competitive price possible,” Border says. “Our goal is to protect our customers and help them best use their hard-earned money to protect what matters most.”
Although a few other insurance companies are already offering some type of insurance for ride-sharing drivers, Allstate’s policy is significant because it covers drivers in case they get in an accident when they are not logged into the ride-hailing app and when they are on their way to pick up new fares, which policies offered by other companies fail to address.